Anixter accepts $4.5 billion buyout offer from WESCO

PITTSBURGH and GLENVIEW, Ill.—On Jan. 6, after a month-long bidding war with an affiliate of private equity firm Clayton, Dubilier & Rice, which first proposed purchasing Anixter for $3.8 billion in October 2019, the Glenview, Illinois-based company announced a merger agreement with Pittsburgh-based WESCO International.

Boards of both Anixter and WESCO unanimously approved a $4.5 billion cash-and-stock deal, according to the announcement. The agreement needs shareholders' and regulators' approvals, but it is anticipated to close in the second or third quarter.

“The transformational combination of WESCO and Anixter will create a premier electrical and data communications distribution and supply chain services company,” John J. Engel, WESCO's chairman, president and CEO, said in the announcement. “With increased scale and complementary capabilities, we will be ideally positioned to digitize our business, expand our extensive services portfolio and supply chain offerings and deliver solutions to our customers whenever and where ever they need them around the globe.”

Sam Zell, chairman of Anixter board of directors, commented that this agreement demonstrates what a strong business the Anixter team has built.

“The agreement with WESCO is a great result for our stockholders who will receive near-term value and stand to benefit from the combined company's growth and prospects.”

Recognizing that this agreement is the result of a very thorough process, Bill Galvin, Anixter's president and CEO commented on people, relationships, technology and reach.

“It's a recognition of the enormous value created by our talented people, Anixter's deep industry relationships, innovative technology solutions and global reach,” Galvin said. “Looking ahead, the combination with WESCO will allow the combined company to build on our complementary capabilities and create new was to serve customers and partners.”

Here's the must-know details about the deal at a glance:

• The combined company will have pro forma 2019E revenues of approximately $17 billion.
• Anixter employees approximately 9,000, and by combining with Wesco, will see a 13 percent market share.
• Anixter shareholders will receive a cash-and-stock payment valued at $100 a share, including $70 in cash.
• Wesco shareholders will own 84 percent of the combined company.
• Anixter shareholders will own 16 percent of the combined company.
• Anixter's stock closed Monday, January 6, 2020 at $98.33.
• Barclays is serving as financial advisor to WESCO and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.
• Centerview Partners LLC is serving as lead financial advisor and Wells Fargo Securities, LLC is also serving as financial advisor to Anixter, while Sidley Austin LLP is serving as legal advisor.